US-Iran ceasefire eases market nerves, but risks remain

Lale Akoner, Global Market Analyst at eToro says: “Markets got a dose of relief after the US and Iran agreed to halt hostilities and move toward reopening the Strait of Hormuz, one of the world’s most important oil shipping routes.

“For markets, the story is less about geopolitics and more about inflation. Lower oil prices could ease pressure on consumer prices, reducing one of the key risks facing central banks. The caveat is that markets are pricing in a lasting improvement in the situation. Any renewed tensions in the Middle East could quickly reverse some of the recent moves, particularly in energy markets.

“Investors should view this as a positive development for risk assets, but not necessarily a game changer. Lower oil prices and easing inflation concerns are supportive for equities and bonds, yet the bigger drivers remain economic growth, inflation trends and central bank policy. This week’s Fed meeting is likely to matter more for markets than the headline itself.”